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December 02, 2013

What do corporates want? KYB (Know Your Bank)

Another day, another Financial Services Club meeting. This time it was the turn of Colin Tyler, CEO of the Association of Corporate Treasurers.

Colin delivered a fascinating presentation around whether banks are delivering for their corporate customers’ needs.

Based upon my own notes of the evening, the answer appears to be: not really.

Most corporates want banks to show them how to sweat their assets, enhance and/or unlock shareholder value, improve their working capital and ease the supply chain. What they tend to get is product sales focused bank relationship managers, who focus upon the bank’s needs rather than the customers.

Even more interesting is the idea that banks are asking their corporate customers to help them with the regulators. The regulators should be focused upon the corporate needs but, rather than this being the case, the corporations are being caught in the bathwater being thrown out by the regulator in their sweeping changes to trading operations (as noted last week at the Nordic Financial Services Club).

Equally, the discussion led to a key point that banks talk about KYC – Know Your Client – but corporates are now talking about KYB – Know Your Bank. This is because the risks associated with corporate banking have been heightened since the crisis of 2008, and corporates need to be much more aware of bank operations, activities, charging and organisational structures than ever before.

Colin needed the presentation by summarising the corporate requirements from their bank as being:

There’s an acronym in there somewhere, but I’m not going to try to create it.

What I did like was the slides that Colin used at the end of his presentation that showed how bank advertising has changed over the years and compared and contrasted the US and British approach to corporate needs.

American banks focused upon the people making the difference:

British banks focused upon being international:

Interestingly, three decades later, the emphasis is different for a large, American bank, where the focus is efficiency (automation, process, technology, innovation):

But pretty much the same for the British bank:

Having said that, my favourite ad was the one from TD Bank in 1980, with special guest star Michael Caine!